reg review 2 a 1272021

  1. Accountants are liable for a breach of contract to
    Intended beneficiaries.
  2. The nature of the breach determines
    Damages.
  3. A contract must be in writing if it cannot be completed within
    One Year
  4. A contract binds an accountant to complete an engagement with
    Due care. 
  5. A contract is not enforceable if it is
    Contrary to law.
  6. Recovery from breach of contract ordinarily is limited to
    Compensatory damages.
  7. ________ are rarely allowed.
    Punitive damages.
  8. An engagement letter may prevent
    Contract disputes.
  9. Breach of contract occurs when a duty under the contract is not performed. Accountants are liable for breach of contract both to clients and third parties who are --------------------------------- of the accountant’s services.
    Breach of contract occurs when a duty under the contract is not performed. Accountants are liable for breach of contract both to clients and third parties who are intended beneficiaries of the accountant’s services.-
  10. ---------------- for breach of contract depend on the nature of the breach. The breach may be material or minor.
    Damages for breach of contract depend on the nature of the breach. The breach may be material or minor.
  11. In some cases, a contract must be in writing, for example, if it cannot be completed within --------------
    In some cases, a contract must be in writing, for example, if it cannot be completed within 1 year.
  12. The accountant is implicitly bound by the contract to perform the engagement with --------------- (nonnegligently) and in compliance with professional standards.
    The accountant is implicitly bound by the contract to perform the engagement with due care (nonnegligently) and in compliance with professional standards.
  13. A contract must have a legal purpose and is not enforceable if it is ------------------------------ or is against public policy as declared by the courts.
    A contract must have a legal purpose and is not enforceable if it is contrary to the law or is against public policy as declared by the courts.
  14. Recovery for breach of contract is ordinarily limited to ----------------------------------.
    Recovery for breach of contract is ordinarily limited to compensatory damages.
  15. A court awards -------------------------- only when the breach is malicious, willful, or physically injurious to the nonbreaching party.
    A court awards punitive damages only when the breach is malicious, willful, or physically injurious to the nonbreaching party.
  16. Although not necessary for the formation of a contract, an engagement letter may prevent -----------------------------
    Although not necessary for the formation of a contract, an engagement letter may prevent contract disputes.
  17. Requires periodic reporting to the SEC.
    Securities Exchange Act of 1934.
  18. A substitute for proof of reliance on a misstatement.
    Fraud-on-the-market theory.
  19. Must include all critical accounting policies and practices to be used.
    Audit reports to audit committees.
  20. Must include the treatment of financial information preferred by the external auditors.
    Audit reports to audit committees.
  21. Imposes civil liability for fraud in a new issue of securities.
    Securities Act of 1933.
  22. Accountants’ nonfraud civil liability to third parties under this act requires proof of privity of contract.
    Securities Act of 1933
  23. Prohibits any scheme to defraud.
    Rule 10b-5 of the Securities Exchange Act of 1934.
  24. ---------------------------------------- prohibits any person in connection with the purchase or sale of any security from employing any device, scheme, or artifice to defraud.
    Rule 10b-5 of the 1934 Act prohibits any person in connection with the purchase or sale of any security from employing any device, scheme, or artifice to defraud.
  25. The ------- act requires issuers to report annually (Form 10-K), quarterly (Form 10-Q), and currently (Form 8-K).
    The 1934 act requires issuers to report annually (Form 10-K), quarterly (Form 10-Q), and currently (Form 8-K).
  26. The accountant-client privilege does not apply to
    Criminal tax matters
  27. Federal law does not recognize a broad privilege for accountant-client communications. However, a confidentiality privilege covers most ------------------------- provided to a current or prospective client.
    Federal law does not recognize a broad privilege for accountant-client communications. However, a confidentiality privilege covers most tax advice provided to a current or prospective client.
Author
Joens1313
ID
354377
Card Set
reg review 2 a 1272021
Description
reg review 2 a 1272021
Updated